Ad campaign demands energy firms get no cash from carbon pricing

An ad campaign is describing one of the country’s main clearinghouses for environmental policy as a shill for the oil and gas industry.

The Ecofiscal Commission, a Montreal-based think-tank, recommends transitional funding for companies with high carbon emissions — including those in the oil and gas sector — using revenues from carbon pricing.

But Nicholas dePencier Wright, a lawyer and former Green Party candidate who is a director at Real Climate Action, said those funds amount to subsidies for an oil and gas sector that should be “phased-out.”

“When I see groups and organizations advocating for funneling carbon tax revenues into the tar sands, that strikes me as both alarming in and of itself and also contradictory of the aim of a carbon tax,” said Wright.

To get its point across, Real Climate Action has taken out ads in newspapers and on bus stops — including one bus shelter between Parliament Hill and the Langevin Block, which houses the Prime Minister’s Office.

The bus ad targets Ecofiscal Commissioner Stewart Elgie, a University of Ottawa professor and a member of the Smart Prosperity Institute’s steering committee, and asks him to step down from the Ecofiscal Commission.

The Ecofiscal Commission is “funded and championed by Big Oil” and is an “oil mouthpiece,” the ad says. Its website points to financial assistance from Suncor Energy and TD Canada Trust as further evidence the commission is protecting the petroleum sector. Real Climate Action advocates for a one-hundred per cent “renewable green energy future” and seeks to out organizations with ties to the oil and gas sector, said Wright.

Christopher Ragan, chair of the Ecofiscal Commission and a professor at McGill University, said the commission is independent and he is happy to receive corporate funding from the oil sector.

“Anyone who read our reports with an open mind would pretty quickly lead to the conclusion that we clearly care about the economy, we clearly care about the environment and we are looking for practical policies that can make improvements in both dimensions,” said Ragan.

Real Climate Action’s depiction of transitional funds for high-emitting sectors — also called ‘cash rebates’ and ‘output-based allocations’ by provincial governments — as subsidies mischaracterizes how they work, he said.

“A lot of people just say you’re taking money from one hand and giving it through the other and they’re offsetting each other … and this is just not true.”

“Providing transitional support gives industrial emitters time to make necessary adjustments,” the report says. “But competitiveness pressures are likely to decline over time, as more jurisdictions implement carbon pricing, and as the market works by producing carbon-reducing innovation that emitters can adopt to reduce emissions at lower costs.”

The report only calls transitional support a high priority in Alberta. It mostly leans on “investments in low-carbon technology” as a good place to put revenue from carbon taxes.

Real Climate Action then points to documents that indicate the Canadian Association of Petroleum Producers (CAPP) made the same recommendations during talks with Ottawa over climate regulations. Those documents were obtained through a freedom of information request made by Greenpeace in Saskatchewan.

“An option available to governments it to recycle some or all of the revenue generated by industry back to achieve further emissions reductions from the emitting sectors,” says CAPP’s August 2016 submission to Environment Minister Catherine McKenna’s consultation on greenhouse gas emission policies.

“It seems as if Ecofiscal — in presenting funds going to the oil and gas industry as one of several options — is legitimizing or normalizing that idea, and the oil industry association are the ones behind closed doors lobbying for the funds to go them,” said Wright.

Ragan, the commission head, said the group’s motivation is to find environmental policies that do the least damage to economic growth. With that frame of reference, transitional funds go hand-in-hand with a carbon price, he said.

The funds would target high-emitting and trade exposed industries at a time when competing jurisdictions have a lower carbon price than Canada’s, said Ragan, citing oil and gas investment that can migrate to shale operations in North Dakota.

“It’s based on the level of your economic activity and you only get it if you stay here and you keep hiring people and you keep producing,” he said.

Over time, using both levers helps companies stay profitable while lowering emissions, and transitional funds can be eliminated when carbon prices rise elsewhere.

“Once the United States or the rest of the world catches up to our carbon price, then you don’t need these things anymore,” he said.

Alberta has transitional funds and calls them output-based allocations, while Ontario and Quebec have cash rebates that do the same thing, said Ragan.

He likened the dynamic to having two tools for two separate problems — emissions and economic growth — that both have an impact on corporate and individual behaviour over time.

“Our commissioners who write the reports are fully independent,” said Ragan. “Our advisors are from government and business and civil society and all parts of the country, but it’s our commissioners who write the reports. And they are following where the analysis leads them.”

“I’m delighted we have financial support from Suncor and TD. I think it’s really important to have some corporate presence.”

Most of the commission’s funding, around 85 per cent, comes from family foundations that are “environmentally-oriented,” he said.

Wright also charges that the Ecofiscal Commission is misleading the public by calling itself a ‘commission’ when it is not a government commission.

On that, Ragan said, “it matters far less what we call ourselves than what we are and what we do.”

Wright wouldn’t disclose the names of those funding Real Climate Action without donors’ permission, but said the site might one day have a page with that information.

The group is seeking to create a coalition that includes actors in the renewable energy industry, said Wright.

Aside from being a principal at Wright Business Law in Toronto, Wright is president and CEO of the Geopoliticalmonitor Ingelligence Corp. He was a candidate for the Greens in the October 2015 federal election in University-Rosedale.